Research!

[Les Smith]

Hi, Jim.

Just a brief note that may have some effect on your research.

Most states that require the technician to collect sales-tax on their
work, mandate that the accrual method of accounting be used. That is
to say that the technician may be responsible for remitting the sales
tax to the state BEFORE he actually is paid and collects it from the
customer. EX: it's the last day of a sales-tax quarter. You complete
a $1000 job for a customer to which you add 8% sales tax, $80, making
the bill $1080. You leave the bill, expecting to be paid next month.
You are required, by the accural method of accounting, to remit the
$80 sales tax, ON THE DAY THE WORK IS COMPLETED, even though you haven't
yet been paid for it.  Bummer, huh? On the plus side, you're also al-
lowed to deduct expenses as they accrue, rather than at the time you
actually pay them.

My point is this. You have to use the same accounting method on both
your Federal and State returns. You can't use cash for one and accrual
for the other. Thus, if you collect sales-tax and your state requires
the accrual method of accounting, you Have to use the accrual method
on your Federal return too. You DON'T have a choice. So what type of
accounting method a particular tech may be using, frequently is not a
matter of choice. I think we would all like to be able to use the cash
method, but many times this isn't possible. The regulating authorities
like to make life as complicated as possible, as the accrual method
demonstrates. Given the complications of the accrual method and the
tenacity  of the regulatory authorities when it comes to dealing with
the self-employed (either full-timers, or part-timers), I can't imagine
anyone NOT using their computer to keep things straight. Also, speak-
ing from experience (DON'T ask how! :) ) the authorities seem much more
likely to believe computer-printouts of financial records, than they do
hand-written ones.

Life as a piano-technician would be much simpler, if we didn't have to
constantly worry about the reams of paper-work and record-keeping re-
quired by the regulatory agencies. I'm a pianoman. Not an accountant!

Les Smith
lessmith@buffnet.net

On Thu, 20 Feb 1997 JIMRPT@aol.com wrote:

> List;
>  The fourth biggest lie in the world is "I don't agree with what you say, but
> I will defend until death your right to say it."
> Lighten up, enjoy life, and ignore that which you find to be infantile.
>  Nough said.
> On a different note, re: my request for assitance on bookkeeping methods. To
> this point I have received responses from well over 10% of list subscribers.
> My sincere Thanks to all those who have responded. This sampling more than
> makes up a statistically  reliable sampling of available subscribers and will
> add to the article. Thanks to all who have participated and I will continue
> to add to the data from those who might wish to add to it. I will post a
> synopsis of the data in a few days.
>  With Gratitude.
>  Jim Bryant (FL)
>